Established in 2022, ControlZ is a startup that is bringing India’s first renewed-smartphone category to set new benchmarks in sustainability and promote conscious consumption amongst smartphone users. TimesTech in an exclusive interview with Yug Bhatia, Founder & CEO of ControlZ tried to know how renewed devices are different from refurbished devices, their strategies and business model and much more.
Read the edited excerpts from the interview here:
TimesTech: Tell us about the work that ControlZ does.
Yug: ControlZ is a two-year-old company. We launched commercially in April, from a consumer lens we are about six months old, and we are trying to establish a consumer brand in the space of renewed devices. We call it renewed because we try to differentiate it from the conventional refurbished device because of the following reasons:
The first one being all our devices are as good as new. So, when I show you the device, as a consumer, you cannot tell the difference between a renewed device by ControlZ and a new device. It looks like a new device. The second thing is, it has 18-month warranty. Third is, it comes with a fast charger which is equivalent to a new charger. So, in short, everything is as good as new whether it is the functionality of the device, the experience of the device, and the purchase experience, and obviously for roughly half the price.
So, this is what ControlZ is doing. This is the front-end part of it. This is what the consumer gets to see. But the main question is how are we treating this? Because as good as a new concept is unique to us. No company is selling as good as new devices. All the companies in the refurbishment space cells devices in three or four different conditions. So, they will say, we have as good as a new device but they only sell five to ten percent of the total category. Most devices they categorize as good condition or average condition. Some have 15 scratches, some have 10 scratches, some have X issues and some have Y issues, etc. We are not doing all of that. We are saying, we only sell as good as new.
We specialize only in a few devices. We have currently Apple and One Plus because these premium devices have great consumer trust and demand. We procure components of these devices directly from the source then we go into the market and procure these devices, not from consumers directly, but from companies who procure from consumers. It’s a very specialized and strategic buyback rather than a random buyback from consumers. We bring these devices to our renewal facility and we renew these devices in a very different way.
Once the devices are procured, we dissemble all the devices. We renew each component that is not working, separately, whatever can be renewed, and then we assemble the device again. So again, what you have in your hand is as good as new but it is very much possible that no new component was used in it.
All of these are very unique industrial processes that we have developed ourselves over the past two to three years. So, this is, in short, Control Z.
TimesTech: When new mobiles are available in the 10000-15000 range, why do you want people to buy renewed devices?
Yug: The key is the price of the devices that we are selling and how much it cost as a new device. For example, if you are selling iPhone 10, what would be the price of a brand-new iPhone 10? If you are comparing it to a new Oppo device that would be a slightly unfair comparison.
TimesTech: How you are trying to reduce the anxiety that people have in their minds regarding renewed or used devices?
Yug: We are giving 18 months warranty, an objective thing in the hands of the consumer. That is the most important thing. The second thing is we only sell as good as new devices. This comes across, as a company, we are selling only good quality mobiles. Psychologically, purchase and post-purchase experience are important. If you look at our box, it is a very unique box. We spend more than a year developing that box. If you look at our accessories, the way things are packed. So, everything has been done very thoughtfully and very well. All this creates confidence in bits and pieces. It is not just the product, everything around the product is also been taken care of.
TimesTech: Genuine spares from OEM cost a lot. So, how you are keeping the cost low of the renewed devices?
Yug: This is fundamentally solved by two things. So, 80% of the displays that we have in our devices are not new displays, these are the same old display, and the displays are renewed. So, it would be possible that we have changed the glass of the display or we have removed the scratches from the glass itself or we have changed the OCA or the reflector of the display. So, this is one factor in reducing the cost. The second factor is the volume. So, we do only specialized units but on a big volume. So, this big volume helps us procure directly from the source and which helps us reduce the cost.
TimesTech: Do you have service centers across the cities or do you have a centralized service center?
Yug: We always felt that service is one of the most important respects when you’re selling electronics. So, we didn’t want to risk it by giving it to someone else. More importantly, this is a renewed device. So, it is very difficult to give third-party the know-how of servicing that device. Imagine there is an OEM, for example, it’s Apple. They have their service center but they have third-party also. Apple has its manuals and handbooks and it can explain the third parties how to service an Apple device. But for us, we are not even OEMs. Now, if we give our service to some other party, it will not be the third party but will be the fourth party. So, it is very difficult to manage that.
We took a very conscious policy that we will service it ourselves because components, service quality, and delivery are involved. So, what we have done is that you don’t have to go out to a service center. Anywhere in the country, more than 28,000 codes are covered, you just have to give us a call or Whatsapp or send us an email. We will reverse-pick your device from anywhere in the country, get it to our service center, service it, and send it back to you. All of this happens in less than five days it depending on the pin code. So, somewhere it is two days and somewhere it is five to six days. In case the service cannot happen to a particular device. You get a new device straight away.
TimesTech: What are the challenges that you are facing in the terms of sourcing the old devices or supplying the new devices or sourcing the components?
Yug: Right now, at this stage, the supply or the buyback of old is pretty much solved. A lot of companies including e-commerce companies have worked on this problem for the last five to seven years and they have done a great job at it. So, that problem is solved and we procure from them. The fundamental problem is that of components. If you look at India and you want to talk a little honestly, you will know that there is no component development capability in India. All the electronics that are Made in India are assembled in India. So, look cameras are not made in India, displays are not made in India even small connectors and PCs are also not made in India. All of this is what we have to import. With import also the fundamental challenge in refurbishment is, there are 1,000 excuses in the market and each device has about 50 components. So, 1000 x 50 = 50,000 components. There is no way possible that any company can procure or manage 50,000 different components. It’s not possible. We are trying to limit ourselves to certain kinds of devices- certain models, roughly 10 to 15 at a particular time. We source the components first and then the devices. So, our component sourcing works but still, we have not solved it fully because it’s a very complicated thing. But I think we are ahead of our competition.
TimesTech: What are your plans and focus areas?
Yug: I will tell you about the next year. First of all, we are moving to a new facility which we call Renew Hub based in Sector 18 in Maruti industrial area in Gurgaon. This new facility will be by far the most advanced kind of facility for this domain, at least in the country. It is being built on world-class standards. This facility will be ready by next month. It will have a capacity of renewing about sixty thousand devices per year.
Development number two, we are selling from our website right now and we are expanding that and adding different benefits and functions to our website. For example, we are adding a load of EMI options. EMI options are not available right on second and devices. So, that is one capability that we are building. So, we are partnering with all the major NBFCs, Banks and consumer finance companies.
Number three would be, we are also testing our offline strategy but that would take a longer time. So, these are the three things that ControlZ will be doing soon.
